rfkile
rfkile t1_j7bihe3 wrote
Reply to comment by Independent-Ad-514 in Economic freedom (Index of Economic Freedom) vs Income inequality (Gini coefficient) in 153 countries [OC] by Independent-Ad-514
The fact that they exist doesn't mean that their situations are necessarily comparable to those of other countries. There may very well be unique facts that impact your situation. You choosing to include those countries without considering whether there are any special circumstances may itself be ignoring the facts.
rfkile t1_j79f3dn wrote
Reply to Economic freedom (Index of Economic Freedom) vs Income inequality (Gini coefficient) in 153 countries [OC] by Independent-Ad-514
Just glancing at the figure, it seems like Sudan, Venezuela, and Zimbabwe are outliers. I'm wondering what the correlation coefficient would be if you neglected those.
rfkile t1_j7bwdgk wrote
Reply to comment by boldjarl in Economic freedom (Index of Economic Freedom) vs Income inequality (Gini coefficient) in 153 countries [OC] by Independent-Ad-514
Unless a relationship is absolutely perfect and there's no noise whatsoever, you'll have an r^(2) less than 1. A value of r^(2) less than 1 doesn't mean "no trend." It just means "there's some fraction of the dependent variable that isn't controlled by the independent variable."
Also worth mentioning that the value OP provided is r (probably the Pearson Correlation Coefficient) rather than r^(2) Coefficient of Determination. While certainly, you can look at the graph and see plainly that the r^(2) is less than 1, it's important to distinguish between r and r^(2)